What if you bought Natural gas in 1990?
Commodities · Energy. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play1.8× · S&P 500 same money: $19,429
$1,000 in Natural gas at the start of 1990 would be worth about $1,750 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
US natural gas, priced at the Henry Hub in Louisiana, is the most volatile major commodity. It spent the 1990s cheap, then entered a decade of spikes: a cold winter in 2000-2001, Hurricane Katrina in 2005 knocking out Gulf of Mexico production, and a 2008 peak above $13. In 2006 the hedge fund Amaranth Advisors lost about $6 billion in a matter of weeks on natural-gas bets, a reminder of how violently the market moves.
Then technology changed the supply side for good. Horizontal drilling and hydraulic fracturing unlocked enormous shale reserves such as the Marcellus in Pennsylvania, and production surged so fast that prices fell below $2 in 2012. Cheap gas displaced coal in power plants and made the US a major exporter of liquefied natural gas from 2016. Occasional shocks still happened: the February 2021 Texas freeze and the 2022 European energy crisis briefly pushed prices up sharply. Over the full period gas ended within shouting distance of where it began, a reminder that one technology can cap a market for a decade.
The lesson: A technological shock on the supply side can cap a commodity for years, no matter how compelling the demand story looks.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 1990 | $2.00 | $1,750 | $19,429 | 1.8× |
| 1995 | $1.60 | $2,188 | $14,783 | 2.2× |
| 2000 | $2.30 | $1,522 | $4,626 | 1.5× |
| 2003 | $5.00 | $700 | $7,727 | 0.7× |
| 2005 | $6.00 | $583 | $5,763 | 0.6× |
| 2007 | $6.00 | $583 | $4,789 | 0.6× |
| 2008 | $7.80 | $449 | $4,626 | 0.4× |
| 2010 | $5.60 | $625 | $6,071 | 0.6× |
| 2012 | $3.00 | $1,167 | $5,312 | 1.2× |
| 2015 | $3.00 | $1,167 | $3,301 | 1.2× |
| 2018 | $3.00 | $1,167 | $2,519 | 1.2× |
| 2020 | $2.10 | $1,667 | $2,092 | 1.7× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 1995, turning $1,000 into $2,188. The S&P 500 from that same year: $14,783.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Natural gas is one of 258 positions on the wheel — including the ones that went to zero.
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